Taking credit for the work of others

PlanningA short while ago, I received an unsolicited email from the interim (and soon to be departing) CAO, John Brown, with the subject, “Ideas. Observations. Musings  . Opinions  . Facts ?” (yes, written just like that…). Although he says he never reads my blog, it inspired me to write this post.

He wrote (copied in its original form and punctuation):

I  was wondering if you might  be interested in the towns (sic) recent building permits statistics  reflective of  highly positive growth  in the tax base during the recent past ?  As you are aware from your time on council our financial position has not been  robust in the past  however you will be glad to hear that  it is now showing clear signs of significant  improvement  .

Last  year the total construction value was   115,560 999 dollars – the highest ever I believe  .  I am advised that this year is tracking  , potentially  , higher  . A good  news ‘ economic development ‘  story about the high level of investment in the town based on confidence in the local economy  , based on facts  ,  might be of interest  ?  You can let me know  and I will have them forwarded to you.

(Yes, I too wince at his inability to communicate effectively in writing, but at least he seems to have learned how to use the shift key since his last emails to me, even if the apostrophe still eludes him. But proofreading and clarity are likely overrated… just assume it’s all labelled ‘sic’…)

Now, anyone who follows municipal politics at all knows that council has little if anything to do with private building or construction (unless you’re voting for your brother-in-law’s projects). It is the work of developers, it is not done overnight, but generally part of long-term planning and investment over several years, especially where subdivisions and large scale projects are concerned. So this council cannot take any credit for recent construction. Balmoral Village, just as a single example, was approved last term, although the fees are collected this term.

Plus the fact that none of The Block have ever advocated, championed or even suggested anything resembling the whisper of a ghost of a hint of an economic policy should be considered at any time this term. Not just growth-related: crafting ANY economic policy has so far escaped their attention and grasp. Not surprising, since the collective business and economic acumen of The Block is somewhat less than that of the average anteater.

So why try to pretend this growth is the result of anything The Block has accomplished? To date their greatest intellectual achievement is a bylaw that prohibits throwing birdseed on your driveway. Everything else they have done has been utterly negative, selfish and destructive.

What, then, was the interim CAO’s motive to inspire me to write about this? Surely he knew I’d present a factual counterpoint to his spin.

Continue reading “Taking credit for the work of others”

Grim outlook for Canadian manufacturing

Abandoned Arrow Shirt factory, OntarioThe outlook for Canadian manufacturing, warns the CIBC, will remain grim as long as a strong dollar keeps labour costs high, “deepening the hollowing out of the industrial heartland and boosting regional income inequality in the years ahead,” says the Huffington Post.

The Canadian loonie looks good for shoppers who buy consumer and retail goods made outside Canada. Our import prices are actually 10% lower than they were a decade ago. Back in 2002, when the loonie was $0.62CAD to the $USD, our labour costs were lower, so it made Canada a good place in to make products. Now we’re not: we’re too expensive. Our labour costs are now 20-25% higher than those in the USA (see graph, below).

The factories have moved elsewhere and they’re not coming back any time in the foreseeable future. So you have to ask which is the greater advantage for Canadians: being able to buy cheaper goods from China or having good-paying jobs so you can afford better products?

Canadian labour costs risingThe CIBC report notes that, “Canada is no longer a cost-effective location for a host of non-resource-related manufacturing activities. Initially, shutdowns were seen in sectors like apparel and furniture that had earlier hung on in part due to an undervalued exchange rate. More recently, Canada has lagged in attracting or retaining facilities for autos and parts, rail cars, steel mills, and other goods where the competition is now more weighted to US producers… barring a big correction in the currency, or a sharp shift in relative wages, factory growth will subsequently stall.”

Ontario has been hardest hit, the report continues. “Real GDP growth in that province has now trailed the rest of the country for nine straight years—underperformance that has coincided with C$ appreciation. Had Ontario kept pace with the rest of the country, its economy would be almost 10% larger than it is today, making it much easier for the government to dig itself out of deficit.”

Only last month, the HuffPost reported that Canada lost industrial plants at twice the pace of the United States in 2011. The story adds,

Ontario led the decline in industrial plants, shedding 33 of them for a total of 7,853 jobs lost, the report stated. Quebec shed 23 plants, costing nearly 3,000 jobs. Western Canada and Atlantic Canada lost fewer than 2,000 industrial plant jobs each.
But the 14,000 jobs lost at shuttered plants don’t tell the full story. According to Statistics Canada, total employment in manufacturing declined by 50,000 from December, 2010, to December, 2011.
The IIR report suggests the pace of industrial job losses will be similar this year. There are already 76 plants scheduled to close in the next few months in the U.S., while Canada already has four closings scheduled, for job losses totaling 2,700.

At the bottom of the story is a slide show that documents the 10 hardest-hit manufacturing sectors, with the greatest job losses since before the 2008 recession.

Manufacturing isn’t the only sector hit. It’s the classic domino effect. Last month we saw a story on the grim outlook for the air cargo industry: “The immediate future doesn’t look at all rosy for the air cargo business.”

A report from TD Securities just after the recession began stated, “There’s no reason to expect anything good from the Canadian manufacturing shipments report on the 16th, with every single leading indicator that we know of in negative territory.” That picture has not improved significantly. A look at their forecasts for 2012 doesn’t show any improvement predicted. The once robust automobile sector remains flat: “…there is limited upside for new auto sales over the medium term. Perhaps the most difficult challenge facing automakers is the likely absence of any meaningful pentup demand in the Canadian market.” The housing market is at a crossroads: “Overall, we expect sales to record annual average declines of 2.4% and 3.5% in 2012 and 2013, respectively. Prices are poised to suffer a similar fate – annual average declines of 1.9% in 2012 and 3.6% in 2013.”

Furniture sales forecasts have been rewritten with lower expectations. Canadian retail sales in December – the best month of the year – were lower than expected (“There is also a direct connection between the retail shopping numbers and the Personal Consumption Expenditure (PCE) line item in gross domestic product (GDP). PCE accounts for 55% of Canada’s national output.”)

Overall, the economic future does not look rosy for Canada, and especially not for Ontario. Coupled with the Drummond Report on Ontario’s troubled economy and its recommendations for significant cuts to government spending, it looks like we’re in for a few lean years. It’s something for Collingwood Council to keep in mind when working through its next few budgets.